When setting up a company in the form of a limited liability company, it is necessary to establish its authorised capital (kapital zakładowy, podstawowy) and meet a number of conditions relating to it, which are described below.

The minimum authorised capital for a limited liability company is set at 5,000 zł. The minimum value of a share is set at 50 zł. per share.

The company’s share capital may be formed through contributions in cash or in kind. Cash contributions are transferred to the company’s account. Contributions in kind – such as equipment, property or trademarks – must be described, valued and must be tangible assets.

A declaration of share capital coverage is a mandatory attachment to the application for the registration of a limited liability company. A declaration by the board of directors regarding contributions to the share capital confirms that the entire share capital has been paid up by the shareholders.

Cash contributions must be paid in full prior to the company’s registration in the National Court Register (KRS). When registering a company via the S24 system, only cash contributions are permitted.

Contributions in kind to the share capital should be made in the context of a traditional memorandum of association in the form of a notarial deed. When making contributions to the share capital in kind, it is necessary to specify the subject of the contribution in kind and the person making the contribution, as well as the number and nominal value of the shares acquired in exchange.

Once the company has been registered, the share capital may be used for any corporate purposes – equipment, rent or salaries.

Increasing the share capital of a limited liability company requires a resolution by the shareholders’ meeting to amend the company’s articles of association (by a two-thirds majority) and an entry in the National Court Register (KRS). The most common procedure is to increase the share capital by creating new shares and having them acquired by existing or new shareholders. Shareholders have a right of first refusal to acquire new shares (in proportion to their existing shares), unless the company’s articles of association or a resolution exclude this right by a two-thirds majority vote.

A reduction in the authorised capital requires a resolution by the general meeting of shareholders to amend the articles of association (two-thirds majority) and an entry in the National Court Register (KRS). The resolution must specify the amount by which the capital is to be reduced and the method of reduction (e.g. a reduction in the nominal value of the shares or the buy-back of a portion of the shares) . The management board must announce the planned reduction and invite creditors to lodge objections within three months of the announcement. If any creditor objects, the company must either satisfy the objection or secure the creditor’s claim.

In a limited liability company, the authorised capital forms part of the equity and is included in the liabilities on the balance sheet.

A company may not distribute profits to shareholders if this would reduce its assets below the authorised capital. Authorised capital may also not be distributed as dividends.

Contributions to the authorised capital of a limited liability company are subject to civil law transaction tax (PCC) at a rate of 0.5% of the amount of the authorised capital contributed.